With new electric vehicles coming onto the market it is becoming clear that technology is reaching a tipping point. But is the development of electric vehicle technology going to be enough for electric cars to dominate the road?

To understand the impediments that electric vehicles face it is worth going back in time, not to the 1880’s when gas lighting was beginning to dominate the streets, but to the turn of the last century when automobiles first began to be commercially manufactured.

The tipping point for car manufacturing was Ford’s Model T which took the automobile from a luxury good to a mass consumer good. In 1904 Ford manufactured 1,708 cars. By 1916 they were manufacturing 533,921 cars.

In addition to buying the car, drivers needed two things to be able to enjoy their new product; roads and petrol.

Today there are around 6,400 petrol stations scattered around Australia. This is down from a peak of 20,000.

But a network of petrol stations wasn’t born overnight. It took until 1936, with the establishment of the Australian Motorists Petrol Company Ltd, for Australia to develop the first network of petrol stations. Before that time distribution of petrol occurred through a variety channels. The first petrol stations around the world were actually a side business for pharmacies in Germany. In Australia country pubs played a role as “filling houses’, taking on a role in transport that they had filled since the network of horse staging posts was established by Cobb and Co.

The point for electric vehicle infrastructure is that home delivery of petrol never really figured in the development of the automobile, and yet that is the principal mechanism we are thinking about to distribute electricity to electric vehicles.

Without imagination the lack of electric vehicle infrastructure will become the principal reason that could hold up electric vehicles.

What are the issues?

In addition to buying an electric car, a driver has to install their own infrastructure. This requires home ownership or enlightened landlords.

It is not just approval to install and willingness to bear the cost, it is the evolution of technology.

It is not yet clear how electric charging technology will evolve. When investing in electric vehicle infrastructure, drivers will be conscious how quickly technology can change, with the potential that they will be left with out-dated technology. The government and private sector are in much better positions to manage these kinds of technology risks.

The growth of apartment living in Australia is notable. Whilst there are examples of charging technology being installed in new apartment blocks, the cost of this technology is effectively paid by all building owners - whether or not they actually use the technology. There are also insurance implications around electric charging facilities that are still in the infancy of being addressed.

The thirs issue is simply the number of cars in Australia that are not garaged but are parked on the street. You only have to drive down any street in a major city to see the number of cars that would struggle to be charged from a household connection.

You only have to drive down any street in a major city to see the number of cars that would struggle to be charged from a household connection.

Intervention and challenges

If there are challenges with households investing in electric vehicle infrastructure, should the Federal Government intervene?

The challenge for the Federal Government is that it is reliant on revenues from fuel excise taxes. Petrol and diesel excise contributes around $18 billion to the Budget coffers. Quick growth of electric vehicle sales would undermine fuel excise revenues, increasing pressure on the Federal Government to reform funding of roads. This would not be a bad thing but we have to recognise that fuel excise revenues will act as a disincentive to act quickly.

Another impediment to the Federal Government subsidising electric vehicle charging infrastructure is the impact of electric vehicle charging on the stability of the energy grid. The challenge with electric vehicle charging is not just how vehicles are charged, but when. Without price incentives that encourage off-peak charging, if we were to see rapid growth of electric vehicles the impact on electricity demand during peak periods would need to be understood.

This is not to suggest that the Federal Government shouldn’t support funding of electric vehicle infrastructure, but the reality is that the incentive for the Federal Government to lead are not strong.

Funding and finance

So, how could electric vehicle infrastructure be funded and financed?

To understand where there may be opportunities we need to firstly understand the core difference between petrol stations and electric charging stations – and that is time.

With petrol stations it is possible to fill up and be gone in a few minutes. For electric charging, although technology is changing, the fastest charging options are still going to take 30 minutes.

Europe’s Ultra-E project is currently looking to establish a network of ultra-fast electric charging stations that would enable long distance travel. Charging that would give a driver 300km will take 30 minutes. The challenge that ultra-fast stations have is to manage simultaneous charging. Whilst a highway petrol station may have ten cars simultaneously filling up, with electric charging the more cars that charge at the same time (without investment in dedicated lines that would need to be funded), the slower they all collectively charge.

Whilst road-side charging stations will no doubt become a vital part of electric vehicle charging overtime, we should not see this as the solution to scalability. The increased strain on the energy grid if people charged simultaneously on the way home from work on a hot summer’s day means that we can’t think of electric vehicle charging in the same way we think about filling up at a petrol station.

What are the opportunities?

The opportunity is to think about establishing electric infrastructure where people already park their cars for a period of time.

There are three opportunities that, with a bit of creativity could become centres for electric charging, particularly in:

shopping centres

train stations and

off-street parking in local communities.

It would be possible for instance for Westfield to develop part of its parking facilities to service electric vehicles on a pay for service basis. State Governments could similarly develop charging stations for electric vehicles at train stations.

There is also the capacity that energy companies could develop charging stations. Rather than seek to implement an NBN type of curb-side delivery network, the most efficient option would be to develop charging stations on council land, overcoming the ownership issues around housing and electric charging without imposing the cost of house by house charging facilities.

With technology still in development, the way forward for electric vehicle charging is to develop a series of trials with open public reporting of outcomes and feedback. With the right structure it is possible for the development of electric vehicle charging stations to be led by the private sector working in collaboration with all levels of government.

There is a clear role for project leadership to initiate trials and ensure that learnings from development of new electric vehicle infrastructure is shared across the community.

The way Australia initially approached fuel distribution was different to other nations. The use of pubs as the earliest petrol stations reflected the state of the nation at the time. Today we need the same preparedness to think outside the box to develop electric vehicle charging infrastructure.